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Category: Covid 19

Avoid second lockdown cashflow crisis

Posted on by Susie Kevern

Does a second lockdown mean cashflow crisis for your business? What can you do to avoid it?

We know that a lot more businesses are allowed to stay open this time than were able to in March, but staying open is not necessarily a good outcome. A lot of SMEs have used up what little cash reserves they had and are facing a tough winter.

Recent surveys have shown that 33% of SMEs think they will be impacted worse by this second lockdown and 20% are predicted to not make it through.

So what can you do to help your business avoid a second lockdown cashflow crisis?

Unfortunately I don’t have any miracle cure but the things that I have seen working to help businesses are:

  • Make sure you have an up to date cashflow forecast and try to make a list of the assumptions that you’ve made in it – how much, how often, what credit, is it realistic?
  • Look out for opportunities to cut costs; insurance may be getting more expensive at the moment but energy costs and interest rates have fallen. There are also grants available for investing in energy efficiency measures which may pay off in the future.
  • There are new extensions to both the bounce back and CBILS loans which may support your cashflow even if you have already used the facilities on offer.
  • You can “top up” an existing Bounce Back loan to reflect your new circumstances or use the government backing to add invoice financing or maybe an overdraft facility to an existing CBILS loan.
  • In addition to this the repayments can now be spread over 10 years which reduces the cashflow effects significantly. You can find my earlier advice on applying for CBILS support in this post.

The most important thing to do is to make sure you have accurate, up to date information to base decisions on: knowledge really is power here.  And check out my checklist for adapting your cashflow forecast for lockdown II to make sure you have a picture of the future that you can rely on.

Closing date for CBILS applications

Posted on by Susie Kevern

Right now (mid September 2020) the media are shouting about the end of the furlough scheme, but the closing date for applications to the CBILS scheme at the end of this month seems to be slipping by with less interest.

Most businesses that I come across have taken advantage of the Bounce Back Loan scheme, even if they didn’t need it, but in some cases this is not going to be enough to support their cashflow over the winter. With just two weeks left now is the last chance take advantage of the government security and zero fees offer.

So what’s the action plan?

First I would revisit the cashflow forecast; it would be naive to suggest that we know any more about what will happen over the next 6 months than we did in a similar position 6 months ago, but we have more evidence to see what the impact of seismic changes is on our specific circumstances.

Don’t forget that any VAT deferred in March will have to be paid back in early 2021.

Even if you have already applied to your bank unsuccessfully there are opportunities to access CBILS through “alternative” lenders like Funding Circle and I have even seen marketing from IWOCA so you can shop around, and in doubt contact advisers to test the water.

The critical thing to do however is to check on the cashflow forecast, to make sure that you are making decisions about the future rather than being a passenger on the ride!

Check out my guide to applying for CBILS support here: Government support